The money multiplier is the ratio of
a. bank reserves to bank deposits.
b. the change in the money supply to the change in the monetary base.
c. the money supply to the monetary base.
d. bank deposits to bank reserves.
e. both b and c.
E
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Vicki consumes meat loaf and pizza. To keep her utility constant, you must give her more of one good if you take some of the other away. This information implies that
A. Vicki’s marginal rate of substitution must be constant along her indifference curve. B. Vicki’s indifference curve must have a negative slope. C. the prices Vicki must pay for meat loaf and pizza are always the same. D. Vicki’s marginal utility from each good must be constant along her indifference curve.
If, when a firm doubles all its inputs, its average cost of production decreases, then production displays
A) declining fixed costs. B) diseconomies of scale. C) diminishing returns. D) economies of scale.
Suppose the U.S. economy is producing at the natural rate of output. A depreciation of the U.S. dollar will cause ________ in real GDP in the short run and ________ in inflation in the short run, everything else held constant
(Assume the depreciation causes no effects in the supply side of the economy.) A) an increase; an increase B) a decrease; a decrease C) no change; an increase D) no change; a decrease
Does having an absolute advantage in producing both goods mean that you’re guaranteed to have a comparative advantage in both goods? Explain your answer.
What will be an ideal response?